Industrial production dipped to a “disappointing” 0.6 per cent in August after some signs of improvement in the previous month, prompting companies to step up their demand for a rate cut to boost economic growth.
Factory output, which showed some signs of recovery after recording a growth of 2.8 per cent in July, remained almost flat year-on-year because of a slump in production of consumer goods and durables.
The low growth in the Index of Industrial Production (IIP) is due to contraction in the mining and manufacturing sectors, showed the data released by government on Friday. The IIP grew by 2 per cent in August last year. “The numbers are really disappointing, it is very low,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.
As per the data, IIP for April-August worked out to 0.1 per cent compared with 0.2 per cent in the same period of 2012-13.
The IIP figure for July has been revised upward to 2.8 per cent from 2.6 per cent, it said. It had contracted by 1.8 per cent in June.
The manufacturing sector, which constitutes over 75 per cent of the index, contracted by 0.1 per cent in August as against an expansion of 2.4 per cent in the year-ago period.
The mining sector, with a weight of about 14 per cent in the IIP, showed a contraction of 0.2 per cent in August as against a decline of 0.3 per cent in the same period a year ago.
Power generation showed a healthy growth of 7.2 per cent in the month under review. The growth works out to 4.5 per cent in April-August.
Output of capital goods, a parameter of demand, showed a decline of 2 per cent as against a contraction of 4.4 per cent in August 2012. However, on a cumulative basis, the segment showed an expansion of 0.8 per cent in April-August as against a sharp contraction of 14.4 per cent.
The data further revealed that consumer durables segment contracted by 7.6 per cent in August, while the decline in consumer goods segment was 0.8 per cent.
The growth in consumer non-durables sector was 5 per cent as against 6 per cent in the year-ago period. During April-August, the growth cumulates to 6.6 per cent. Intermediate goods segment expanded by 3.6 per cent and basic goods by 1.5 per cent in August.